PMI Services: Strongest four-month growth in the services sector
New Delhi| According to the PMI survey, increase in demand in December helped growth in the service sector. During this period, trade flow and production got a boost. The result was that service providers hired more workers to meet the increasing demand.
According to the PMI survey, “the level of business activity in the services sector rose from 58.4 compared to the month of November to 59.3 in December”. This is the strongest growth rate in four months. Despite a slight decrease in the employment growth rate compared to November, the pace of job creation was the highest recorded since data collection began in December 2005. According to the survey both new orders and business activity from sub-sectors such as finance and insurance showed the strongest growth. Companies in the services sector remained optimistic about future growth, and their confidence levels remained above the long-term average.
The increase in capacity of service sector companies, new customer inquiries and budget allocation for marketing are giving positive signals. According to the survey, there was a soft increase in input costs. However, food, labor, and materials companies still had to spend more. Similarly, inflation eased slightly in December, providing relief to customers.
According to the survey, there are signs of solid growth in international orders received by Indian service providers. However, demand growth abroad has fallen to a three-month low.
The HSBC India Composite Output Index, which tracks services and manufacturing activity combined, rose to 59.2 in December from 58.6 in November, indicating the fastest growth in private sector output in four months.
